The Association of Builders and Developers (ABAD) has opposed budgetary measures, including increasing the Capital Gains Tax (CGT) on real estate to 15 percent for filers and 45 percent for non-filers and imposing a 5 percent federal excise duty (FED) on new plots, commercial, and residential properties to curb speculation.
ABAD Chairman Asif Sum Sum argued that the real estate sector is already overburdened with various taxes and that additional levies are unnecessary.
“New taxes will not only strain the real estate sector further but also deter overseas Pakistanis from investing their hard-earned money in Pakistan’s property market,” he stated. He warned that these measures could drive overseas Pakistanis to invest in other countries, which could significantly impact the local real estate market.
“It appears that the government aims to shut down the local construction industry by imposing new taxes,” he commented, noting that under sections 236C and 236K of the Income Tax Ordinance, there are already advance taxes of 3 percent, a withholding tax of 1 percent, and a town tax of 2 percent, among other levies.
He emphasized that these new taxes will ultimately affect consumers, a point seemingly overlooked by the government.
He also claimed that the government had ignored their pre-budget proposals, highlighting the growing frustration within ABAD and the urgent need for dialogue between the government and the real estate sector.
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